Research and development tax relief
June 26, 2020

Research and development tax reliefAre you eligible for R&D tax relief?

Research and development (R&D) is fundamental to the success of many businesses. Without R&D, innovation and invention are stifled and new products and services may never see the light of day. R&D can help to bring entirely new products or services to the marketplace, or to hone existing ones. Helping companies to retain a competitive edge and stay one step ahead of rivals.

Michael Chadwick, founding Director at Chadwick & Company helps explain some of the complexities surrounding the tax rules applicable to companies engaged in research and development.

Claiming tax relief

There are specific tax rules applicable to companies engaged in research and development. Additional special double tax relief could reduce your company’s corporation tax liability or even result in cash back. Our in-house accountants and tax advisors have successfully made scores of research and development tax relief claims, some resulting in refunds from HMRC of tens of thousands of pounds.

Research and development qualifying expenditure

It’s worth looking at how your resources are deployed and if any of your business activities can count towards R&D. Research and development qualifying expenditure items include staff costs for time spent on R&D projects, utilities and software used in R&D. Some payments to subcontractors are also eligible and there are 100% tax relief research and development allowances available on capital items acquired specifically for R&D.

SME research and development relief allows companies to claim up to 230% of their qualifying expenditure from yearly profits. This includes the normal 100% deduction, plus an additional 130% research and development tax deduction. If a company makes a loss, then it can claim a repayment.

Time is of the essence

Any claims must be made within two years of the costs being incurred, thus timing is dependent on the financial year-end of your company. If you believe that your company may qualify for research and development tax relief, we will be happy to help with your claim. We provide a smooth, fully managed service, whatever your requirements. Research and development projects are well worth exploring. They can make a difference to maintaining your competitive edge and with the enhanced tax relief, may not be as costly as you anticipate.

Read more detailed advice on research and development tax relief. To find out if you qualify, email or call us on 0161 370 9600.

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